Thursday, April 23, 2015

Corporate Welfare in Maine

Sometime this year, the state of Maine will cut two checks worth a total of $2.8 million and mail them to out-of-state investors. Next year, it will send two more checks, worth $3.2 million, to the same recipients. It will repeat that process for the next three years until roughly $16 million of taxpayer money has been withdrawn from Maine’s General Fund.

This payout of taxpayer dollars through 2019 will make whole a commitment the state made in December 2012 to encourage what was – on paper – touted as a $40 million investment in the resurgence of the Great Northern Paper mill in East Millinocket.

But the resurgence failed. A year after the investment was received, the mill’s owner, private equity firm Cate Street Capital of Portsmouth, New Hampshire, shuttered the mill and laid off more than 200 people. Great Northern filed for bankruptcy a few months later with more than $20 million in unpaid bills owed to local businesses, leaving many to wonder what happened to that $40 million investment that was supposed to save the mill.

The reality is most of that $40 million was a mirage.

Like most states corporate welfare in Maine is at epidemic levels. Our right-wing Gov. LePage, who has made a career out of campaigning against welfare for the poor, so far has had little to say about this case. This story makes poor people's welfare cheating (which is minuscule) look like nothing in comparison.

Sadly the Democrats in our state legislature teamed with the Republicans to pass this horrific measure to further enrich the pirate class.